John Tutte has been the CEO of Redrow plc (LON:RDW) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Redrow
How Does John Tutte's Compensation Compare With Similar Sized Companies?
Our data indicates that Redrow plc is worth UK£2.2b, and total annual CEO compensation is UK£2.0m. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£583k. We examined companies with market caps from UK£1.5b to UK£4.8b, and discovered that the median CEO total compensation of that group was UK£1.7m.
That means John Tutte receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Redrow has changed over time.
Is Redrow plc Growing?
Over the last three years Redrow plc has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). In the last year, its revenue is up 10%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Redrow plc Been A Good Investment?
Most shareholders would probably be pleased with Redrow plc for providing a total return of 65% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Remuneration for John Tutte is close enough to the median pay for a CEO of a similar sized company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Redrow shares with their own money (free access).
If you want to buy a stock that is better than Redrow, this freelist of high return, low debt companies is a great place to look.
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